The
agreement requires First American Cash Advance to forgive over
$600,000 in defaulted loans owed by nearly 2,700 West Virginia
consumers. FACA also agreed to pay $200,500 to the State of West
Virginia.
The agreement requires FACA to forgive over $600,000 in
defaulted loans owed by nearly 2,700 West Virginia consumers.
FACA also agreed to pay $200,500 to the State of West Virginia
and $22,000 for the State to distribute to approximately 400
West Virginia consumers who paid interest charges on payday
loans after May 31, 2006.
FACA made loans in West Virginia on behalf of a South Dakota
state-chartered bank regulated by the Federal Deposit Insurance
Corporation (“FDIC”) and the South Dakota Division of Banking.
Federal law allowed the bank to charge interest rates that were
permissible in the state where it was headquartered, South
Dakota, even though these rates exceeded the maximum rates
permissible in West Virginia.
The name of the South Dakota bank was not released by the AGs
office.
In 2006 the FDIC urged its supervised institutions to exit the
payday lending industry. As a result, the bank decided it would
no longer issue loans through FACA at its West Virginia
locations. This decision resulted in the closure of FACA’s West
Virginia locations in July of 2006.
